Which Scenario Best Exemplifies the Concept of Opportunity Cost

question 6

Multiple Choice

Which scenario best exemplifies the concept of opportunity cost?

• A) Arthur has been offered a promotion to department manager. The promotion means more hours at work and more responsibilities, but includes only a title change and not an increase in salary.
• B) Louisa has a small bakery that generates a modest profit for her. She knows if she pools her profits for two years she will have enough money to expand her bakery and increase her profits.
• C) Bernardo has been offered a chance to invest in a startup company that has the potential to generate a great deal of profit if it is successful. Since the cost to invest is very high, he must decide if the potential profit is worth the risk.
• D) Beth has enough money to either buy her son a new pair of jeans before winter or get him vaccinated against the flu. She knows that once she chooses one alternative, she will be unable to afford the other.

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Definitions:

Bounded Ethicality

The concept that cognitive biases and organizational pressures lead individuals to engage in actions that are unethical without fully realizing their wrongdoing.

Ethical Standards

Guidelines of conduct that dictate how a person should behave based on moral duties and virtues.

Canadian Bank CEO

The chief executive officer of a banking institution based in Canada, responsible for the overall strategic direction and management.

Unethical Sales Behaviour

Practices by sales personnel that are deceptive, misleading, or otherwise violate ethical standards, often to achieve sales targets or personal gain.